HMRC has published detailed guidance on Making Tax Digital for income tax (MTD for ITSA), which will see the end of self-assessment tax returns.
As of 6 April 2024, sole traders and buy-to-let landlords with a qualifying income of £10,000 or more will have to file their tax returns via MTD-compatible software.
HMRC is calling on individuals, tax agents and accountants to start using the beta testing system to provide feedback on their experiences, allowing HMRC to finesse the system before its launch.
The trial is limited and only open to landlords with UK and overseas property, and self-employed workers with a sole source of income.
Only those whose accounting periods align to the tax year from 6 April to 5 April of a given year will be able to participate in the trial.
The guidance has clarified a definition of qualifying income, how to report other income, and how residency and domicile affect said income.
The document states:
"Qualifying income is the combined income that you get in a tax year from self-employment and property income sources. We assess this before you deduct expenses (gross income or turnover).
"All of your qualifying income must be reported through MTD-compatible software."
Visit the Government website to check your eligibility for the MTD for ITSA pilot.
Ask us about Making Tax Digital.
